Nunavut Mining Regulations

PROTECTED B (When Completed)

Privacy Act Statement

This statement explains the purposes and use of your personal information. Only information needed to respond to program requirements will be requested. Collection and use of personal information is in accordance with the Privacy Act. In some cases, information may be disclosed without your consent pursuant to subsection 8(2) of the Privacy Act. The collection and use of your personal information for this Northern Mining activity is authorized by the Territorial Lands Act section 12, and is required for your participation. We will use your personal information for the purpose of filing a mining royalty return. We share the personal information you give us when someone requests to receive a copy of an approved record. The information collected is described in Personal Information Northern Mining Bank, AANDC PPU 806, will be retained for 30 years after last administrative use and is then transferred to Library and Archives Canada. As stated in the Privacy Act, you have the right to access your personal information and request changes to incorrect information. Contact our office at 1-867-975-4280 Mining Recorder's office or 1-819-997-9828 Northern Mineral Resources to notify us about incorrect information or to withdraw participation after submitting your information.

This return, and attached schedules with reconciliation to company's financial statements, and with all information required by the Nunavut Mining Regulations shall be delivered to the Chief, Financial Analysis and Royalty Administration Section of the Department of Indian Affairs and Northern Development, on or before the last day of the fourth month after the end of each fiscal year of the mine

Name of the Mine

Fiscal Year of the Mine

Name and Address of the Operator

Certification

Name and Position of Authorized Officer

Name of Company

I, the undersigned, do hereby certify that the statements contained in this Mining Royalty Return are true and accurate, are in accordance
with the accounts and records of the aforementioned Company and to my best knowledge comply with the requirements of the Nunavut
Mining Regulations.

Calculation of Value of Output of Mine

Letters refer to ss. 69(4)

($)

($)

Proceeds from the sales, during the fiscal year, of minerals or processed
minerals produced from the mine to persons not related to the operator

Market value of any minerals or processed minerals produced from the mine
that were sold or transferred to a person related to the operator or that have
been cut or polished before their sale or transfer

Market value of any precious stones that have been cut or polished before
their sale or transfer

(A)

Market value of any inventories of minerals and processed minerals produced
from the mine, as at the end of the fiscal year

(B)

Market value of any inventories of minerals and processed minerals produced
from the mine, as at the beginning of the fiscal year

(C)

The lesser of:
(a) Payments received during the fiscal year related to a cost that has been
claimed as a deduction or allowance

(b) The cost related to payment above

(D)

Any excess amount referred to in paragraph 70(5)(b)

(E)

Amounts withdrawn during the fiscal year from a mining reclamation trust
established in respect of lands referred to in Section 3, up to a maximum of the
total of the amounts contributed to the trust

(F)

Any proceeds received during the fiscal year from insurance on minerals or
processed minerals produced from the mine

(G)

Amounts of any grants or loans in respect of the mine that were made to the
operator in respect of the mine that are forgiven, by the federal government in
the fiscal year

(H)

Total of deductions and allowances claimed under subsection 70(1) (per page (I)
4)

(I)

The amount by which the sum of the amounts referred to in paragraphs 70(8)
(d) and 70(9)(e) exceeds the undeducted balance of the depreciable assets
eligible for a depreciation allowance at the end of the fiscal year

The amount by which the sum of the amounts referred to in paragraphs 70(9)
(c) and (d) exceeds the undeducted balance of the development allowance at
the end of the fiscal year

Deductions and Allowance

($)

(a) The costs, incurred during the fiscal year, of sorting, valuing, marketing and selling the minerals or
processed minerals produced from the mine

(b) The costs, incurred during the fiscal year, of insurance, storage, handling, and transportation to the
processing plant or market in respect of, minerals or processed minerals produced from the mine

(c) The costs, incurred during the fiscal year, of mining and processing minerals or processed minerals
from the mine

(d) The costs, incurred during the fiscal year, of repair, maintenance or reclamation at the mine

(d.1) The consideration paid by a member of a joint venture for minerals or processed minerals diverted from
another member of the joint venture, when each member is delivering a separate mining royalty return
in accordance with section 74.

(e) General and indirect costs incurred during the fiscal year for property, employees or operations at the
mine that are not otherwise allocated to operating costs

(f) Exploration costs per page 4 below

(g) Depreciation allowance per page 5

(h) Development allowance per page 5

(i) Mining reclamation trust contribution allowance per page 6

(j) Processing allowance per page 6

(k) Costs with respect to minerals or processed minerals from the mine processed at another mine or at
any facilities located outside the territory as per 70(1)(l)

Total Deductions and Allowances:

(I)

Calculation of Exploration Costs Deduction

($)

Value of output of the mine, calculated after deduction of the amounts referred to in paragraphs 70(1)(a) and
70(1)(f) and before deduction of any depreciation allowance, mining reclamation contribution allowance,
development allowance or processing allowance.

(A)

(10% of (A)

(B)

(i)*
Name of Owner

(ii)
Percentage
Ownership of
the Mine
(%)

(iii)
Column (ii) x B
($)

(iv)
Actual exploration
costs incurred
during the year as
per paragraph
70(1)(g)

(v) Lesser column (iii)
and column (iv)
($)

Costs eligible for exploration deduction (sum of column (v)): (C)

LESSER OF (B) OR (C) ARE COSTS ELIGIBLE FOR DEDUCTION

* For each owner please attach a list of claim and lease numbers and specify the exploration costs incurred on each.

Calculation of Depreciation Allowance

($)

Undeducted balance of depreciable assets at the beginning of the fiscal year**

(1)

** Where this is the first return this amount should be the balance as at the date of commercial production

Cost of additions during the fiscal year to depreciable assets

(2)

The lesser of:

(a) Proceeds from the disposition during the fiscal year of depreciable assets or
insurance proceeds as the case may be or

($)

(b) The original cost of the assets

(3)

Undeducted balance of depreciable assets at the end of the fiscal year prior to deduction of a depreciation
allowance

(1) + (2) - (3)

(4)

Amount of depreciation claimed for the current fiscal year (Cannot exceed amount in 4) (Claim
this amount on page 4)

(5)

Undeducted balance of depreciable assets allowance at the end of the fiscal year after deduction of a
depreciation allowance for the current fiscal year (4) - (5)

Note: If depreciable assets are used for processing mineral or processed minerals produced at another mine see sections 70(8)(c) and
70(10)

Development Allowance

($)

Undeducted balance of the costs eligible for a development allowance***

(1)

Exploration costs incurred on the mining property, after the date of commencement of production, during the (2)
fiscal year

(2)

Costs incurred after the date of commencement of production, during the fiscal year at the mine for workings
designed for continuing use, including the clearing, removing or stripping of overburden from a new deposit at
the mine, the sinking, excavation or extension of a mine shaft haulage way or similar underground work, the
construction of an adit or other underground entry and the construction of a road or tailings disposal
structures

(3)

The lesser of:

(a) Costs referred to in subparagraph 70(1)(i)i and ii that were incurred by a
previous owner on a recorded claim or lease that has been incorporated into
the existing property

($)

(b) The purchase price of the claim or lease

(4)

Undeducted balance of the costs eligible for the development allowance at the end of the fiscal
year prior to deduction of the development allowance (1) + (2) + (3) + (4)

(5)

Amount of development allowance claimed for the fiscal year (Amount claimed cannot exceed
(5) above) (Claim this amount on page 4)

(6)

Undeducted balance of costs eligible for the development allowance at the end of the fiscal year
after deduction of a development allowance for the current fiscal year (5) - (6)

*** If this is the first mining royalty return for the mine, attach a schedule indicating the balances of costs incurred up to the
date of commercial production as identified in subsections 70(1)(i)i and ii which make up this amount.

Note: Explorations and development costs incurred above must be supported by a list of the claim and lease numbers upon which these
costs were incurred.

Mining Reclamation Trust Contribution Allowance

($)

Undeducted balance of contributions to the mining reclamation trust at the beginning of the fiscal year

(1)

The amounts contributed to the mining reclamation trust during the fiscal year

(2)

Undeducted balance of contributions to the mining reclamation trust at the end of the fiscal year prior to
any deduction of a mining reclamation trust contribution allowance for the current fiscal year

(3)

Amount of mining reclamation trust contribution allowance claimed for the fiscal year (Claim this amount
on page 4)

(4)

Undeducted balance of contributions to the mining reclamation trust at the end of the fiscal year after
deduction of a mining reclamation trust contribution allowance (1) + (2) + (3) - (4)

(5)

Processing Allowance

($)

Original cost of the processing assets at the beginning of the fiscal year

(1)

Original cost of processing assets added during the fiscal year

(2)

Original cost of assets sold, discarded or disposed during the fiscal year

(3)

Original cost of the processing assets at the end of the fiscal year (1) + (2) - (3)

(4)

Original cost of processing assets included in item (4) above but not used during the fiscal year

(5)

Original cost of processing assets eligible for a processing allowance
at the end of the fiscal year

(6)

8% of value of (6) above

(7)

Value of output per page 3 (A to H)

(8)

Allowable deductions and allowances per page 4 item (a) to (i) + (k)

(9)

(8) - (9)

(10)

65% of item above

(11)

Processing allowance: the lesser of (7) or (11) above (Claim this amount on page 4)

Note: Where a mine is in production for less than 12 months in a fiscal year or a fiscal year of a mine is less than 12 months, the item (7)
above shall be prorated based on the number of months in a fiscal year that the mine is in production. See 70(2)

Note: Where in a fiscal year the operator of a mine uses processing assets at this mine to process minerals or processed minerals
produced at another mine the asset base used for the calculation of the processing allowance shall be reduced by a percentage
equal to the proportion of the mill operating costs attributable to the processing of the minerals or processed minerals from the
other mine. See 70(8)